Revenue Deal Moves Closer to Conference Committee as State Credit Rating Gets Downgraded
From PA Chamber of Business & Industry
The state Senate returned to Harrisburg last week, days after the House passed its version of a non-tax revenue package to pay for the $32 billion General Fund budget that became law on July 10. Senate leaders quickly made it clear that they didn’t support the House’s plan to fill a $2.2 billion revenue gap through one-time transfers, securitization of the Tobacco Settlement Funds and liquor and gaming expansion; and voted 43-7 on Wednesday to non-concur in the legislation.
This makes it all the more likely that the revenue deal will ultimately be decided through a conference committee in the coming weeks. This little-utilized procedural move will form a committee comprised of lawmakers from both chambers to reach consensus on a revenue plan that will then be voted up or down in the House and Senate. The need for them to act has hastened quite a bit, as the Commonwealth was met with the unwelcome news last week that credit rating agency Standard & Poor’s downgraded the state to an A+ rating; which is only better than two other states well known known for their financial problems – Illinois and New Jersey. According to S&P, among the reasons for Pennsylvania’s downgrade were a “misalignment” of revenues and expenses in the 2016-17 fiscal year that triggered the current deficit; failure to finalize the revenue package for the $32 billion budget that became law in July; and state Treasurer Joe Torsella’s decision to stop extending a line of credit to pay the state’s bills, which has resulted in missed payments due to cash flow problems.
Following the Senate’s non-concurrence vote last Wednesday, the chamber recessed to the call of the President Pro Tempore (a six-hour call) meaning that they will be ready to return to the Capitol should a revenue resolution be reached.